Federal pay freeze is good news, but it's just a beginning (12/10/10)

The Issue: President Barack Obama announces that government salaries will not increase for two years.

Our Opinion: That's a good start. Now Congress needs to act on other cuts in spending.

President Barack Obama's announcement that federal salaries will be frozen for two years is welcome news.

The cuts, announced Nov. 29, would save $2 billion in the current fiscal year and more than $60 billion over the next 10 years - a big step in the right direction during these times of pinched budgets.

Federal employees may not agree, since those $60 billion will be coming out of their hides, so to speak, but they would do well to remember that their salaries ultimately come out of taxpayers' hides, and taxpayers have been hurting for a couple of years.

Even with the recession over and consumer spending inching up, unemployment remains high. In October the figures were a gloomy 9 percent in the U.S., 10.9 percent in the state, 9.4 percent in Berks County and 12.9 percent in Reading.

To help people cope, Congress is expected to extend jobless benefits for the long-term unemployed for another 13 months. Otherwise, 83,000 Pennsylvanians would lose their unemployment compensation this month alone, including 2,784 Berks Countians.

Other sensible ideas for cutting federal spending were proposed by the National Commission on Fiscal Responsibility and Reform, according to The Washington Post, in a report titled, "The Moment of Truth." Headed by Alan K. Simpson, a former Republican senator from Wyoming, and Erskine Bowles, who served as White House chief of staff during the Clinton administration, the 18-member, bipartisan presidential commission proposed cutting the federal work force by 10 percent - about 200,000 positions - through attrition.

The commission also recommended that government health care costs be controlled - shorthand for shifting the cost onto the workers - by changing the Federal Employees Health Benefits Program to a voucher system, which would grow at a prescribed rate.

Projected savings is $18 billion through 2020.

The proposals were part of an austerity package designed to save the government $828 billion by 2015, with a deficit reduction of $4 trillion by 2020.

Other recommendations included raising the Social Security retirement age to 68 by 2050 and 69 by 2075 while limiting increases in benefits; raising the gasoline tax; trimming or eliminating many popular tax breaks, including the home mortgage deduction; and slashing military spending.

So if the federal employees feel picked on, they shouldn't, as the package spreads the pain around fairly widely.

Of course, such pain means that legislators will find themselves on the defensive from taxpayers who see their benefits being cut, as well as with federal workers who stand to lose income.

Not surprisingly, the supermajority of 14 required to send the package directly to Congress failed to materialize. The good news is that the 11 who did vote yes on Dec. 3 were a bipartisan majority. We hope they and others seize on this momentum to bring the commission's proposals before Congress and enact them expeditiously, so the country can start turning its finances around.